Based on educated guesses for categorised groups of ships, we expect a large share of international shipping fleets to implement LNG propulsion. First and foremost for newbuild ships.
Here at DNV we are already convinced that the case for LNG as a maritime fuel is a strong one:
- The environmental performance is superior to any other realistic ship propulsion alternative.
- The economic performance will be superior given that oil and natural gasprices develop as analysts expect. (I will save the topic of analysts’ accuracy for a later post)
The task of predicting the future is always a challenging one. And especially when there is not an existing market, because then you can’t even apply linear projections. So it will boil down to guessing at some level. The key to success in predicting the future, I believe, is to guess at a level where you can make educated guesses rather than shots in the dark. This is why we have dissected the question of how fast LNG will penetrate the maritime fuel market into smaller sub-questions.
First, the whole fleet of existing vessels can be peeled off; some of them will be converted, but most will either install scrubbers or switch to distillate fuels. So the major transition to LNG will take place for newbuilds.
Second, the newbuilds can be categorised in ship types, geographic region of operation, types of trade, etc. For specific ship types operating in specific geographic areas, it becomes easier to make educated guesses.
After spending a lot of time guessing, which can be a difficult process for engineers, all the answers can be summarised up to the top level, where statements like “the majority of ships ordered in 2020 will be LNG fuelled” can be made. Which is exactly what we were interviewed on by Bloomberg recently.